Third Point may have found a new investment opportunity in PayPal [NASDAQ:PYPL], said two people familiar with the matter.
The well-known hedge fund, which sometimes runs activism campaigns, is poking around the San Jose, California-based fintech company, these people said. Third Point is expected to publish its public 2Q18 investor letter in the near term.
PayPal has been performing strongly so it is not clear what kind of improvements Third Point would suggest, if any, one of the people said.
The company’s stock has soared 150% since eBay [NASDAQ:EBAY] spun off the company in 2015 following a heated activism campaign by Carl Icahn. Icahn lieutenant Jonathan Christodoro continues to sit on the board of USD 105bn market cap PayPal.
Since the spin PayPal has been working to diversify its business beyond providing payment services to eBay users. A 2013 acquisition of e-commerce payment process Braintree has proved to be a homerun thanks in part to its popular Venmo money transfer app.
PayPal has also acquired Xoom and Hyperwallet for cross-border payments and iZettle to move further into omnichannel payments for small merchants. It has committed to spend USD 1bn to USD 3bn on acquisitions annually.
Revenue has been growing at double digit rates and PayPal spent USD 1.8bn on buybacks in the quarter. It held USD 8bn of cash on its balance sheet at the end of 1Q18.
Earlier this month, PayPal completed the sale of consumer credit receivables to Synchrony [NYSE:SY], receiving USD 6.9bn in total consideration.
PayPal is expected to report 2Q18 earnings next Wednesday, 25 July.
PayPal declined to comment. Third Point did not respond to a request for comment.